If a Bank Has $1 Million in Demand Deposits, $350,000

question 44

Multiple Choice

If a bank has $1 million in demand deposits, $350,000 in reserves, and faces a 30 percent reserve requirement, the amount of money that a bank could directly create by loaning out their excess reserves is:

• A)$50,000.
• B)$300,000.
• C)$350,000.
• D)$700,000.

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